Identifying and Boosting 'Gazelles': Evidence from Business Accelerators
67 Pages Posted: 11 Nov 2019
Date Written: August 1, 2019
Abstract
Why is high-growth entrepreneurship scarce in developing countries? Does this scarcity reflect optimal allocations, or constraints? We explore these questions using as laboratory an accelerator in Colombia that selects participants using scores from randomly assigned judges and offers them training, customized advice, and visibility, but no cash. Exploiting exogenous differences in judges’ scoring generosity, we show that alleviating constraints to firm capabilities increases average high-growth by unlocking innovative-entrepreneurs’ potential, rather than by transforming low-quality ideas. Results demonstrate that some high-potential entrepreneurs in developing economies face firm capabilities constraints, and that accelerators can help identify these entrepreneurs and boost their growth.
Keywords: High-Growth Entrepreneurship, Business Accelerators, Young Firms, Firm Capabilities
JEL Classification: G24, L26, M13
Suggested Citation: Suggested Citation